How Does Pay Later Work For Business Transactions?
The act of postponing payments or breaking up large purchases
into smaller payments has been attractive for customers since
eCommerce came into being. With the rise in popularity of the
financial product ‘Buy Now Pay Later’, many fintech companies
are now offering BNPL for SMEs as well.
There are nearly 6 million MSMEs (Micro, Small and Medium
Enterprises) in India, and consistency in cash supply helps in
their growth and development. Fintech companies like KredX are
showing the way for ‘Buy Now Pay Later’ for SMEs. Read on to know the details.
How BNPL for SMEs Work?
In simple words, ‘Buy Now Pay Later’ enables customers to make
payments for their purchases at a later date. It works as a
short-term financing option. A business makes this option
available to customers at the point-of-sale. When checking out,
customers can choose the BNPL payment option.
Before approving this credit facility, the credit profile is
examined minutely. Upon approval, the customers will have to pay
a portion of the amount then and there. He/she can pay the
remaining amount over a stipulated period of time.
After its success in the B2C sector, BNPL is now becoming a
popular option for small and medium businesses seeking formal
Given below are steps by which BNPL works for SMEs:
Step 1: Business buyers visit a merchant's
online store and purchase a product.
Step 2: They choose BNPL at the payment
gateway. Then, they need to agree to the BNPL service provider's
terms and conditions.
Step 3: Buyers place the order. They can opt to
pay the entire amount later. Note that the merchant will receive
the amount immediately.
Step 4: Buyers can choose to convert the total
purchase amount into low/zero interest amounts.
Advantages of BNPL for SMEs
Given below are the advantages of BNPL for SMEs:
- Decreases Cart Abandonment
The absence of convenient payment options increases cart
abandonment in our country. Businesses can reduce it by
introducing the ‘Buy Now Pay Later option. BNPL option is a customer-friendly payment option. It helps
in retaining B2B customers and the growth of one’s business in
case of online methods.
- Attracts Customers
The BNPL option is a good strategy to attract new customers to
an online store. This is because it enables people to make
expensive purchases they were wary of making earlier.
Furthermore, the ‘Buy Now Pay Later’ option encourages new
clients to join. Making purchases through the BNPL credit
facility is more advantageous than buying with credit cards
due to its lower charges and ease of payment.
- Increases Sales
The 'Buy Now Pay Later' option encourages customers to buy
more. This is because the instalment payments of the
BNPL credit facility
make the seller’s goods/services more affordable by offering
an easy repayment option. When one’s customers buy more, the
entire value of the orders also increases. This entire process
paves the way for the
growth of SMEs.
- Inventory Management
Managing the inventory becomes easier for businesses that
offer the BNPL option. When buyers place orders in bulk, one
needs to increase the numbers and pace of production.
Moreover, the ‘Buy Now Pay Later’ option helps producers get
an idea of the number of products that they need to restock.
Additionally, it helps small businesses save costs by not
overstocking and producing the requisite amount of products
- Improvement of Customer Lifetime Value
Customer Lifetime Value, commonly referred to as CLV, is the
entire time the customer spends in a store in his/her life. By
offering BNPL for SMEs, a business can build a loyal customer
base by increasing their purchasing power and reducing their
- Maintenance of Cash Flow
BNPL is an effective option for the maintenance of a B2B
seller's cashflow. While customers receive the product
immediately, the business is also assured of payments. This is
helpful for small businesses as they can maintain cash flow
smoothly and develop their business.
How to Use KredX Pay Later Solution for Small-to-Medium
Given below are the steps by which SMEs can use KredX's BNPL
Step 1: Fill up the application form and sign
the requisite document.
Step 2: Furnish the requisite details and
ensure that you complete API integration.
Step 3: You can view BNPL at your payment
gateway upon successful integration.
Step 4: Business owners will receive the
details of outstanding payment within minutes of a buyer
purchasing a product.
As shown above, integrating KredX's Pay Later solution for
business transactions is a hassle-free process.
Our ‘Pay Later’ solution uses highly advanced technology and
provides working capital finances to MSMEs. Its quick and easy
digital process and smooth purchase experience allow brands and
enterprises to increase their average sales by 40%.
Additionally, B2B sellers can increase their cart conversion
rate by 30%.
Technology is all set to change the economic landscape of India
in the near future. With the country being one of the
fastest-growing markets for digital consumers, there is much
need for an innovative payment method in the B2B sector.
BNPL for SMEs will be most beneficial in
helping small businesses leverage India’s rapid digitization and
take their businesses to new heights.
There are two types of BNPL program limits. Buyer
limit and maximum limit provided. In the buyer
limit, the BNPL program limit depends on a buyer's
sanction limit. One can distribute the maximum
limit provided among multiple buyers.
One needs to subtract the current repayment
liabilities from a buyer’s purchases with the
anchor to arrive at the sanction limits. But there
are other factors as well that help one understand
BNPL for SMEs help new-to-credit buyers repay
small-ticket loans and improve their
People who have a CIBIL score above 650 or are new
to credit can use KredX BNPL online platform.